Funding formula revisited

Posted: Thursday, January 25, 2001

By KATHY DYEMorris News Service-Alaska

JUNEAU -- It took more than a decade for the Legislature to rewrite the state's complicated formula for funding schools. Wednesday morning, a chief proponent of the controversial rewrite approved three years ago spent an hour defending it before a panel of lawmakers.

The House Special Committee on Education met today to review a report released last week by the Department of Education, which compared the old formula to the new formula, in effect since July 1998. The report was critical of some aspects of the new formula and recommended the Legislature repeal a major provision.

Sen. Gary Wilken defended the new formula, criticized as anti-rural by some, saying the old formula unfairly distributed state money and was so complicated even lawmakers didn't understand it.

"If you don't understand something, you don't trust it," said Wilken, a Fairbanks Republican. "You don't want to put money into it if you don't trust it."

Wilken said the new method is simple enough to explain at the dinner table and is based on a school district's size, location and enrollment. He argued it doesn't discriminate against rural schools, saying six of 13 districts that benefited from the rewrite were in rural areas.

He defended the so-called supplemental funding floor -- the major provision the Department of Education recommended repealing -- saying "a deal is a deal."

The supplemental funding floor was part of a compromise worked out toward the end of the 1998 legislative session. Republicans were pushing a rewrite of the school funding formula, but they were meeting opposition from some lawmakers who said the rewrite took state money from rural schools and redistributed it to urban districts.

Under a compromise deal, the Legislature passed the new funding formula but agreed to appropriate millions of dollars, or a supplemental funding floor, so affected schools wouldn't feel the difference right away. The supplemental funding floor is designed to erode as enrollment increases, so eventually the schools will operate under the new funding formula but without the extra state dollars appropriated to cushion the blow.

Wilken said it will take an average of 20 years for the funding floor to completely erode in many districts.

"I suggest that's not very punitive," Wilken said. "I suggest it was very generous."

Out of 53 school districts in the state, 32 mostly rural school districts applied for $17.4 million under the supplemental funding floor provision in the first year the new formula went into effect, said Eddy Jeans, manager of the School Finance and Facilities Section of the Alaska Department of Education and Early Development.

The funding floor has since eroded for nearly all the schools receiving it, and the state expects the extra funding to drop to about $13 million by fiscal year 2002, unless the Legislature repeals the supplemental funding floor provision, said Jeans. The funding floor also erodes if enrollment goes down.

Jeans argued the Legislature should continue to support the funding floor at the current level, about $14 million a year, until the state irons out another wrinkle -- the method used under the new formula to determine how much extra funding some schools should receive to help cover the higher cost of operating in a remote region.

Rep. Peggy Wilson, a Wrangell Republican, said the current method is unfair to some schools in her district. The method says "it costs the same to educate a child in Anchorage (as) it does in Wrangell. I have a problem with that," said Wilson, a member of the education committee.

The Department of Education is asking the Legislature for an unspecified amount of money this session to identify a better method for determining how much districts really need to operate schools. Rep. Con Bunde, chairman of the education committee, said he's open to funding another study, but he will not support any effort to repeal the supplemental funding floor.